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Another Look at Lean and Six Sigma

Integrating the two aid business improvement, Aberdeen data show.

Compiled by Jill Jusko | Dec 02, 2009

If you or your company continues to doubt the potential rewards of lean and Six Sigma, as well as the integration of the two initiatives, consider recent research from the consulting firm Aberdeen Group based both on survey results and interviews. The survey examined several improvement initiatives undertaken by business organizations, including Six Sigma, true Six Sigma (a more rigorous Six Sigma definition), general continuous improvement initiatives and lean.

The end result? Organizations that employed true Six Sigma were twice as likely to be top performers (or produce best-in-class results, by Aberdeen's definition), while those employing Six Sigma or Lean Six Sigma were about 1.4 times more likely to produce Best-in-Class results. Additional analysis by Aberdeen indicates that Lean Six Sigma provides "the most successful approach to business improvement." (The mean performance of best-in-class producers include 19% improvement in profit margin, total financial results of about $5.4 million in the first two years from the start of improvement initiatives, and a 43% improvement in quality, also within the first two years.)

What is Lean Six Sigma? Clearly a combination of both lean and Six Sigma certainly. When combined, says Aberdeen, "the result is a methodology that serves to improve processes, eliminate product or process defects and to reduce cycle time and accelerate processes." Says Cindy Jutras, Aberdeen vice president and research fellow, "Our recent survey indicates that those following the true rigors of Lean Six Sigma are better equipped to improve operational performance to immediately reduce costs and without losing sight of the longer-term goals of profitability and performance."

Incorporating Lean Six Sigma, the report indicates, may require a significant culture change for many companies. And given Six Sigma's focus on statistical data, data collection can prove an additional challenge.

The consulting firm offers several suggestions to companies trying to boost their business performance. Only a small percentage of the worst-performing companies had any sort of Six Sigma effort under way. For them, Aberdeen recommends adopting the rigor such methodologies require. Also, the firm suggests, measure the impact of your business improvement projects. Only 20% of poorer-performing companies do that.

For organizations that already are performing at best-in-class levels, there's always room for improvement. Implementing project management applications can help, says Aberdeen. Also, if you're doing some Six Sigma but not adhering to its rigor (such as adopting a DMAIC methodology, for example), take the next step.